Universal Credit, means-testing, and social security: an article by Jane Millar

By Citizens Basic Income Trust6th February 2018

… Child Benefit is an exceptionally well-directed way of helping families and all the old arguments — contribution of society to the future, supports children regardless of parental employment status, provides a source of income direct to the mother, relieves child poverty — are still good. A significantly higher rate of Child Benefit would mean that adult benefits (insurance and means-tested) would not need child additions, …

Young people need some direct support of their own. In the years when I taught a course on social security benefits, we would look at the gaps in the Beveridge scheme to identify the groups left out of coverage. Young people were a gap then (not yet able to build up their insurance contributions) but they are a positive chasm now. And actually, something like Universal Credit might work well for this group, many of whom are indeed at the mercy of the insecure labour market.

How about converting Universal Credit into something more like a young person’s (up to age 25) income? This should be individually based. It could be means-tested on wages, using the ‘real-time information’ (RTI) system that has been developed for Universal Credit. Or, preferably, it could be flat rate and so more like a basic income for this group. And it could have participation requirements: for example, working, studying, training and apprenticeships, volunteering, parenting care for young children, or combinations of these. Let’s call it the Youth Universal Participation Income or YUPI. …

Fighting the 1966 election, Harold Wilson, leader of the Labour Party, said that under the Conservatives, ‘the welfare state would become the means-tested state’. He wasn’t wrong, although it took some years and Labour had a part to play in this too. But before we go any further down this road, now is a good time to pause and reflect on how much we want to rely on a means-tested approach to deliver the important goal of ‘social security’.